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Article Written for : Forbes.comIs it any surprise that our new president, Donald Trump, may have strategically manipulated the tax code to avoid paying federal income tax? Mr. Trump calls this “smart,” and many in the same boat would agree. Similarly, sophisticated clients and advisors implement legal tactics to prudently preserve and protect wealth.

One strategy growing in popularity is the “self-settled” trust for asset protection. Under traditional trust law, a grantor conveys assets to a trustee, for the benefit of someone else, such as his children. The gift “divides” ownership between so-called legal title and equitable title. The trustee may legally oversee the assets (pursuant to a trust agreement) benefitting beneficiaries (who have no control over trust assets). Once the assets are in trust, they are generally protected from future creditors of the grantor, trustee (with legal title), and beneficiaries (with equitable title).

The Uniform Voidable Transactions Act (UVTA) was recently adopted by the Uniform Law Commission (Commission) as the successor to the Uniform Fraudulent Transfer Act (UFTA). UFTA was itself an update of its predecessor, the Uniform Fraudulent Conveyance Act (UFCA). UFCA was revised to conform the Act to the Bankruptcy Reform Act of 1978. UVTA resolves several “narrowly-defined issues.” UVTA Prefatory Note 5 (2014).

Limited liability companies have become the entity of choice for small business owners and are commonly used by professionals in asset protection planning. Choosing to form an LLC instead of a corporation may be prudent, but it raises the question of where to form the LLC. There are several factors to consider in deciding where to establish the entity. Picking the right LLC jurisdiction may be as important as the decision to use an LLC.

In 2010, the Florida Supreme Court issued a ruling that eviscerated the effectiveness of the Florida single­member LLC for asset protection purposes.

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